The LBP posits that under Sec. 16(e) of RA 6657, and as espoused in Land Bank of the Philippines v. Court of Appeals, it is the purchase price offered by the DAR in its notice of acquisition of the land that must be deposited in an accessible bank in the name of the landowner before taking possession of the land, not the valuation of the PARAD.
The Court agrees with the LBP. The RTC erred when it ruled:
Under Section 16 (e) the payment of the provisional compensation determined by the PARAD in the summary administrative proceedings under Section 16 (d) should precede the taking of the land. In the present case, the taking of the property even preceded the mere determination of a provisional compensation by more than 30 years.
Sec. 16 of RA 6657 contains the procedure for the acquisition of private lands, viz:
SEC. 16. Procedure for Acquisition of Private Lands.¾For purposes of acquisition of private lands, the following procedures shall be followed:
(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in the municipal building and barangay hall of the place where the property is located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.
(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer.
(c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the Government and surrenders the Certificate of Title and other muniments of title.
(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine the compensation of the land by requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision.
(e) Upon receipt by the landowner of the corresponding payment or in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.
(f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. (Emphasis supplied.)
Conspicuously, there is no mention of the PARAD in the foregoing Sec. 16(e) when it speaks of “the deposit with an accessible bank designated by the DAR of the compensation in cash or LBP bonds in accordance with this Act.” Moreover, it is only after the DAR has made its final determination of the initial valuation of the land that the landowner may resort to the judicial determination of the just compensation for the land. Clearly, therefore, it is the initial valuation made by the DAR and LBP that is contained in the letter-offer to the landowner under Sec. 16(a), said valuation of which must be deposited and released to the landowner prior to taking possession of the property.
This too was the Court’s interpretation of the above provision in Land Bank of the Philippines v. Heir of Trinidad S. Vda. De Arieta:
It was thus erroneous for the CA to conclude that the provisional compensation required to be deposited as provided in Section 16 (e) is the sum determined by the DARAB/PARAD/RARAD in a summary administrative proceeding merely because the word “deposit” appeared for the first time in the sub-paragraph immediately succeeding that sub-paragraph where the administrative proceeding is mentioned (sub-paragraph d). On the contrary, sub-paragraph (e) should be related to sub-paragraphs (a), (b) and (c) considering that the taking of possession by the State of the private agricultural land placed under the CARP is the next step after the DAR/LBP has complied with notice requirements which include the offer of just compensation based on the initial valuation by LBP. To construe sub-paragraph (e) as the appellate court did would hamper the land redistribution process because the government still has to wait for the termination of the summary administrative proceeding before it can take possession of the lands. Contrary to the CA’s view, the deposit of provisional compensation is made even before the summary administrative proceeding commences, or at least simultaneously with it, once the landowner rejects the initial valuation (“offer”) by the LBP. Such deposit results from his rejection of the DAR offer (based on the LBP’s initial valuation). Both the conduct of summary administrative proceeding and deposit of provisional compensation follow as a consequence of the landowner’s rejection under both the compulsory acquisition and VOS. This explains why the words “rejection or failure to reply” and “rejection or no response from the landowner” are found in sub-paragraphs (d) and (e). Such “rejection”/“no response from the landowner” could not possibly refer to the award of just compensation in the summary administrative proceeding considering that the succeeding sub-paragraph (f) states that the landowner who disagrees with the same is granted the right to petition in court for final determination of just compensation. As it is, the CA’s interpretation would have loosely interchanged the terms “rejected the offer” and “disagrees with the decision”, which is far from what the entire provision plainly conveys.
x x x x
Under the law, the LBP is charged with the initial responsibility of determining the value of lands placed under land reform and the compensation to be paid for their taking. Once an expropriation proceeding or the acquisition of private agricultural lands is commenced by the DAR, the indispensable role of LBP begins. EO No. 405, issued on June 14, 1990, provides that the DAR is required to make use of the determination of the land valuation and compensation by the LBP as the latter is primarily responsible for the determination of the land valuation and compensation. In fact, the LBP can disagree with the decision of the DAR in the determination of just compensation, and bring the matter to the RTC designated as [Special Agrarian Court] for final determination of just compensation.
The amount of “offer” which the DAR gives to the landowner as compensation for his land, as mentioned in Section 16 (b) and (c), is based on the initial valuation by the LBP. This then is the amount which may be accepted or rejected by the landowner under the procedure established in Section 16. Perforce, such initial valuation by the LBP also becomes the basis of the deposit of provisional compensation pending final determination of just compensation, in accordance with sub-paragraph (e). (Emphasis supplied.)
It is clear from Sec. 16 of RA 6657 that it is the initial valuation made by the DAR and the LBP that must be released to the landowner in order for DAR to take possession of the property. Otherwise stated, Sec. 16 of RA 6657 does not authorize the release of the PARAD’s determination of just compensation for the land which has not yet become final and executory.
Moreover, it bears pointing out that, pursuant to DAR Administrative Order No. 02, Series of 1996, entitled Revised Rules and Procedures Governing the Acquisition of Agricultural Lands subject of Voluntary Offer to Sell and Compulsory Acquisition pursuant to Republic Act No. 6657, the DAR Municipal Office (DARMO) first prepares a claim folder (CF) containing the necessary documents for the valuation of the land. The DARMO then forwards this claim folder to the DAR Provincial Office (DARPO) which, in turn, has the following duties: “Receives claim folder and forwards to the DAR-LBP Pre-Processing Unit (PPU) for review/evaluation of documents. Gathers lacking documents, if any.” The DAR-LBP PPU then forwards the CF to the LBP-Land Valuation and Landowner’s Compensation Office (LVLCO) which “receives and evaluates the CF for completeness, consistency and document sufficiency. Gathers additional valuation documents.” Thereafter, the LBP-LVLCO “determines land valuation based on valuation inputs” and “prepares and sends Memo of Valuation, Claim Folder Profile and Valuation Summary (MOV-CFPVS)” to the DARPO. The DARPO then “sends Notice of Valuation and Acquisition to LO [landowner] by personal delivery with proof of service or by registered mail with return card, attaching copy of MOV-CFPVS and inviting LO’s attention to the submission of documents required for payment of claim.”
Notably, DAR failed to prepare the claim folder which is necessary for the LBP to make a valuation of the land to be expropriated. The proper remedy would have been to ask the DAR and LBP to determine such initial valuation and to have the amount deposited to his account, in accordance with Sec. 16 of RA 6657. Nevertheless, it was erroneous for private respondent to have filed a Petition for Determination of Just Compensation with PARAD when the remedy that she was seeking was for the deposit of the initial valuation that the DAR and LBP should have made.
Contrary to the CA’s ruling, the RTC’s failure to distinguish between the initial valuation that is contemplated in Sec. 16 of RA 6657 and the just compensation subject of judicial determination is a gross and patent error that can be considered as grave abuse of discretion. Gross abuse of discretion is defined, as follows:
A special civil action for certiorari, under Rule 65, is an independent action based on the specific grounds therein provided and will lie only if there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law. A petition for certiorari will prosper only if grave abuse of discretion is alleged and proved to exist. “Grave abuse of discretion,” under Rule 65, has a specific meaning. It is the arbitrary or despotic exercise of power due to passion, prejudice or personal hostility; or the whimsical, arbitrary, or capricious exercise of power that amounts to an evasion or refusal to perform a positive duty enjoined by law or to act at all in contemplation of law. For an act to be struck down as having been done with grave abuse of discretion, the abuse of discretion must be patent and gross. x x x (Emphasis supplied.)
It should also be pointed out that in the related Land Bank of the Philippines v. Pagayatan, the Court had found the presiding judge of the RTC, Branch 16 in San Jose, Occidental Mindoro, herein respondent Judge Ernesto P. Pagayatan, guilty of Gross Ignorance of the Law or Procedure and Gross Misconduct for holding Teresita V. Tengco, Acting Chief of the Land Compensation Department of the LBP, and Leticia Lourdes A. Camara, Chief of the Land Compensation Department of the LBP, guilty of indirect contempt for allegedly disobeying the very same Order dated March 4, 2005 of the RTC. In that case, Court ruled:
The partiality of respondent was highlighted when, out of his selective invocation of judicial courtesy, he refused to resolve Leticia and Teresita’s February 14, 2007 Urgent Manifestation of Compliance and Motion and other pending incidents in view of the pendency before the appellate court of the LBP’s Omnibus Motion praying for, among other things, the quashal of the warrant of arrest, whereas he had earlier found Leticia and Teresita guilty of contempt despite the pendency before the appellate court of LBP’s motion for reconsideration of the dismissal of the petition in CA-G.R. SP No. 93206.
Evidently, the RTC had already acted with partiality in deciding the case and with grave abuse of discretion.
Moreover, in order to give life and breath to Sec. 16 of RA 6657, as well as DAR Administrative Order No. 02, Series of 1996, the Court is constrained to direct the DAR and the LBP to make the initial valuation of the subject land as of the time of its taking and to deposit the valuation in the name of the landowner or his estate, in accordance with RA 6657 and the pertinent decisions of this Court on the matter.
The length of time that has elapsed that the landowner has not received any compensation for the land cannot justify the release of the PARAD valuation to the landowner. Sec. 16 of RA 6657 only allows the release of the initial valuation of the DAR and the LBP to the landowner prior to the determination by the courts of the final just compensation due. Besides, it must be stressed that it was only sometime in 2003 that the assignee of the landowner filed a petition for determination of just compensation with the PARAD. Clearly, the landowner slept on his right to demand payment of the initial valuation of the land. Nevertheless, such lapse of time demands that the DAR and the LBP act with dispatch in determining such initial valuation and to deposit it in favor of the landowner at the soonest possible time.
WHEREFORE, the petition is GRANTED. The CA’s August 17, 2006 Decision and March 27, 2007 Resolution in CA-G.R. SP No. 93206 are hereby REVERSED and SET ASIDE. The DAR and the LBP are hereby given three (3) months from receipt of notice that this Decision has become final and executory, within which to determine the initial valuation of the subject lot and to deposit its initial value to the account of private respondent Lubrica.